Thursday, October 13, 2005

In a recent survey by diamondcluster international, there is a high increase in the premature termination of the offshore outsourcing software development contracts. Number of satisfied buyers have decreased from 79% to 62%. According to Tom Weakland, it is not right to blame only offshore software development service provider. Although, many buyers are outsourcing their software development work, they still lack quality to get maximum benefits of outsourcing.This was the third annual study by DiamondCluster and first of its kind where buyers mentioned they are planning to reduce their software outsourcing.

Software outsourcing benefitsTo consider the biggest benefit of software outsourcing, companies mentioned reallocation of internal resources to more critical functions. Also, cost saving was another primary reason but it was second in consideration.Report also mentioned that, companies are learning that, there is no tremendous cost savings. As attrition rate is high in countries like India, companies are also learning cost of losing good people and cost of losing people with specific knowledge.